The European Central Bank is ramping up efforts to push more management and capital out of the City and Canary Wharf, into the EU.
The central banking authority plans to scrutinise and crack down on so-called ‘desk mapping’ – or ‘back-to-back booking’ – to determine whether banks’ key staff, capital and book trades used by EU-based clients are not based outside the bloc.
The bank believes that currently, too many bank rely too heavily on their London units while serving clients across the EU, thereby escaping regulatory scrutiny and oversight, according to a Bloomberg report, citing anonymous sources to the ECB.
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For international banks wanting to do business in the EU post-Brexit, the use of blank typos would reportedly no longer be allowed.
The primary objective is to reduce the number of EU-based clients that are solely or predominantly served by units and teams in the City and Canary Wharf,
JP Morgan, Citi and Goldman Sachs
The ECB is specifically targeting JP Morgan, Goldman Sachs, Citibank, Morgan Stanley and other U.S. investment banks, several European media report today.
Most of these banks have continued serving their EU-based clients from their large offices in London.
“The desk-mapping exercise is at an early stage and still ongoing. Thus the ECB has not yet given feedback to individual banks on its outcome,” an ECB spokeswoman reportedly said.
Read more: Deutsche Bank to move another 100 jobs out of London in post-Brexit overhaul
Since the 2016 referendum, banks have reluctantly moved some jobs and operations out of London, primarily to Paris, Dublin, Frankfurt and Amsterdam.
Despite the noise, the modest number of relocations have, so far, not threatened London’s status as a global financial powerhouse.
Moreover, restrictions in movement on both sides of the Channel, as a result of the pandemic, complicated any further job moves and relocation plans.
The ECB, however, has told banks it will no longer allow the ongoing pandemic as an excuse to delay post-Brexit implementation plans.
Read more: Switzerland heads for Brexit-like EU clash with €227bn at stake from today
Still no financial services deal
The ECB’s move comes only weeks after news that France is working to block a post-Brexit financial services pact between the UK and the EU over the ongoing row about fishing rights.
The UK and EU announced in March that it had drafted a regulatory co-operation agreement, known as a Memorandum of Understanding, on financial services, however it is yet to be signed or made official.
The agreement will outline how financial services regulators in the UK and EU will maintain open lines of communication when making decisions, but will stop short of giving City of London firms renewed access to EU markets.
Read more: France wants to delay UK-EU Brexit financial services pact over fishing row
All 27 EU member states have to sign off on the Memorandum of Understanding, with this process reportedly yet to begin.
French officials, however are reportedly trying to stall the signing of the Memorandum of Understanding due to the country’s fishermen finding it difficult to get fishing permits for British waters.
The issue blew up earlier this month when more than 60 French fishing boats created a blockade around the island of Jersey, leading Boris Johnson to send two Royal Navy gunboats to patrol the protest. French president Emmanuel Macron sent his own naval ships in retaliation.
Read more: UK eyes post-Brexit trade deals with Gulf states
https://news.google.com/__i/rss/rd/articles/CBMihAFodHRwczovL3d3dy5jaXR5YW0uY29tL2JyZXhpdC1lY2ItdG8tY3JhY2stZG93bi1vbi1kZXNrLW1hcHBpbmctaW4tdGhlLWNpdHktdG8tZHJpdmUtbW9yZS1iYW5rZXJzLWFuZC1jYXBpdGFsLWZyb20tbG9uZG9uLXRvLXRoZS1ldS_SAYgBaHR0cHM6Ly93d3cuY2l0eWFtLmNvbS9icmV4aXQtZWNiLXRvLWNyYWNrLWRvd24tb24tZGVzay1tYXBwaW5nLWluLXRoZS1jaXR5LXRvLWRyaXZlLW1vcmUtYmFua2Vycy1hbmQtY2FwaXRhbC1mcm9tLWxvbmRvbi10by10aGUtZXUvYW1wLw?oc=5
2021-05-27 11:47:00Z
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